ND Paper, a subsidiary of Nine Dragons Paper, has agreed to acquire Resolute Resolute Forest Products' recycled bleached kraft pulp mill located in Fairmont, West Virginia, US in a deal worth $55m.
Under the terms of the definitive agreement, Nine Dragons will acquire the kraft pulp mill for $55m plus certain elements of working capital, payable in cash.
Located in the northern part of West Virginia, the Fairmont Mill is equipped to manufacture recycled pulp used in a range of products, from packaging to tissue paper.
With an annual production capacity of approximately 218,000 metric tons, the mill is claimed to be one of three pulp mills in the world that produces air-dried recycled pulp.
As part of the agreement, ND Paper agreed to offer employment to Fairmont mill employees, upon completion of deal.
Resolute president and CEO Yves Laflamme said: “Proceeds from this asset sale will enable us to further increase liquidity, and continue to improve our balance sheet and financial flexibility.
“Over the coming days, we will communicate with our customers to discuss the transition of supply as we seek to optimize our recycled bleached kraft pulp business at our Menominee, Michigan facility.”
Subject to customary closing conditions and approvals, the transaction is scheduled to be closed within the next two months.
ND Paper CEO Ken Liu said: “Our acquisition of the Fairmont Mill enables us to further our US and global growth, and sustains the momentum commenced by our recent acquisitions of the Biron, Wisconsin and Rumford, Maine pulp and paper mills acquired from Catalyst Paper in Q2 2018.
“Not only is this transaction consistent with our long-term strategy of environmentally-sustainable papermaking, but also it further supports Nine Dragons’ company-wide fiber sourcing requirements and global growth initiatives.”
Nine Dragons produces broad variety of packaging paperboard products, including linerboard, high-performance corrugating medium, coated duplex board, as well as recycled printing and writing paper and specialty paper.
The firm operates nine paper mills operating in Asia as well as two facilities in the US through its wholly-owned subsidiary ND Paper.